Sales and Use Tax Annotations

Annotation 550.0085

(a) IN GENERAL—FACILITIES FOR CONSUMPTION

550.008580/80 Rule—Juice Bar. The taxpayer operates a juice bar, where fruit juices, ice cream and yogurt are sold. The business is located within a food court inside a shopping mall. In addition to the juice bar, taxpayer operates three other units in the food court which sell hamburgers, hot soup, and hot and cold oriental food. All four of the units operate under one seller's permit. There is a common seating area within the food court, which customers may use for consuming the food purchased. All of the juice bar products are served in containers suitable for take-out. The juice bar is not subject to the allocation of rent for the common seating area, although other tenants bear their prorated share.

Because the taxpayer operates four units under one permit within the food court, the activities of all four units combined must be taken into consideration. One hundred percent of the taxpayer's gross receipts is from the sale of food products. In addition, the taxpayer makes sales of meals, sales of food products for consumption at seating facilities which the taxpayer provides, and sales of hot prepared food products. The combined sales of meals and hot prepared foods of the other three units (excluding the juice bar) equal 91 percent of gross receipts. Since this amount is greater than 80 percent, all sales at the juice bar are subject to the sales tax. This is true even if the taxpayer does not provide any seating facilities since the 80/80 rule was already met. 1/13/94.